Turkey July Trade Deficit Misses as Mideast Trade Slumps

Turkey’s trade deficit grew more than expected in July as exports to the Middle East slumped and the European Union took a higher share.

The trade deficit was $9.81 billion in the month, higher than the median estimate of $8.7 billion in a Bloomberg survey of three economists. The deficit in the first seven months of the year rose to $60.5 billion, compared with $51.1 billion a year earlier, according to data published on the statistics office in Ankara’s website today.

The trade balance deteriorated as exports to the Middle East dropped 30 percent to $3.1 billion over the same month a year ago. Exports of precious metals including gold, which improved Turkey’s trade balance last year on soaring demand from Iran and the United Arab Emirates, fell by about 75 percent to $530 million. The EU’s share of Turkey’s total exports rose to 41.5 percent from 34.6 percent a year earlier.

The lira strengthened 0.4 percent to 2.03 per dollar at 10:20 a.m. in Istanbul, paring year-to-date losses to 12 percent. Yields on two-year benchmark notes fell 18 basis points, or 0.18 percentage point, to 9.76 percent, compared with a record low of 4.79 percent on May. 17.

“A monthly foreign trade gap under $10 billion will continue to support positive current account deficit expectations,” Isik Okte, a strategist at Turkiye Halk Bankasi AS (HALKB)’s investment unit in Istanbul, said in e-mailed comments today before the announcement.

To contact the reporter on this story: Onur Ant in Ankara at oant@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

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